The Boston Marathon bombing attacks were not an “act of terrorism,” the US Treasury has ruled, which conveniently means terrorism insurance claims need not be paid out in full.
In the wake of the 9/11 attacks, Congress passed the Terrorism Risk Insurance Act, which created federally-backed insurance in cases of damage due to terrorism. Some Boston businesses were among those that bought the insurance.
Those purchases became relevant after the Boston Marathon bombings on April 15, 2013. Of the 160 companies located near the marathon’s finish line that submitted insurance claims, just 14 percent had purchased terrorism insurance, Insurance Journal reported.
But as of March 2014, many of those that held terrorism insurance had their claims denied. Why? The Secretary of the Treasury Jack Lew had not yet certified the attacks as an act of terrorism, a requirement under the wording of the Terrorism Risk Insurance Act (TRIA) for the insurance claims to be paid out. This despite President Obama’s speech the day after the bombing declaring that “any time bombs are used to target innocent civilians it is an act of terror.”
On Thursday, WGBH reported that the Treasury had reviewed the marathon bombing events and issued a ruling: the attacks were not an “act of terrorism.” The Treasury’s decision is final, and not subject to review.
Part of the reason for that ruling has to do with the amount of monetary damage done by the bombing. Under the federal law’s wording, a destructive act cannot be ruled terrorism if insurance losses total less than $5 million in aggregate. As of March, the state had issued $1.9 million in insurance damage claims, well below the required amount.
